Bowles, “Moral Economy”

The doux commerce thesis, a staple of liberal economics for centuries, teaches that markets tend to civilize people, to make them more stable, gentle, hardworking, and governable. Markets do this by creating incentives for industry and tolerance, and against sloth and fanaticism. From the beginning, skeptics like Edmund Burke have pointed out that the moral values the doux commerce thesis extols actually come from outside the market, and that market incentives, alone, cannot create them. I don’t know if the author is a Burkean, but a new book from Yale University Press, Moral Economy: Why Good Incentives Are No Substitute for Good Citizens, by behavioral scientist Samuel Bowles (Santa Fe Institute), offers a critique of the classical liberal position. Here’s the description from the publisher’s website:

Why do policies and business practices that ignore the moral and generous side of human nature often fail?

Should the idea of economic man—the amoral and self-interested Homo economicus—determine how we expect people to respond to monetary rewards, punishments, and other incentives? Samuel Bowles answers with a resounding “no.” Policies that follow from this paradigm, he shows, may “crowd out” ethical and generous motives and thus backfire.

But incentives per se are not really the culprit. Bowles shows that crowding out occurs when the message conveyed by fines and rewards is that self-interest is expected, that the employer thinks the workforce is lazy, or that the citizen cannot otherwise be trusted to contribute to the public good. Using historical and recent case studies as well as behavioral experiments, Bowles shows how well-designed incentives can crowd in the civic motives on which good governance depends.